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08/11/2021

How Ahold Delhaize USA Performed in Its Mid-Year Report

Food Lion and FreshDirect drive gains as food-at-home trend remains sticky
Mike Troy
Editorial Director, Grocery Group
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How Ahold Delhaize USA Performed in Its Mid-Year Report
Ahold Delhaize USA’s second quarter sales benefited from organic growth and the acquisition of FreshDirect.

The U.S. division of Ahold Delhaize, faced with a challenging prior year comparison, mustered a 2.7% sales increase in the second quarter aided by acquisitions and digital initiatives.

Ahold Delhaize USA sales reached $13.4 billion, of which $908 million were online sales, during the company’s second quarter ended July 4, representing roughly 60% of its Belgium-based parent company’s total sales. Rising costs caused operating profits to tumble roughly 16% to $647 million, based on a quarter end conversion of euros, the currency in which Ahold Delhaize reports, to dollars.

U.S. same store sales excluding gasoline declined 1.5% and were unfavorably impacted by the lapping of significant consumer stock-up activity related to COVID-19 that drove a 20.6% comparable sales increase in the second quarter of 2020. The numbers tell a different story if Ahold Delhaize combines its second quarter of 2021 with the second quarter of 2020, a financial reporting practice that has gained popularity among retailers looking to normalize the huge pandemic drive sales spikes that occurred last year. On a two-year comparable sales stack basis for the second quarter of 2021, growth was 19.1%. The company highlighted that figure as a sequential acceleration versus the 15.8% growth for the full year 2020.

"While communities across our markets reopened during Q2, food-at-home demand remained very resilient. Many of the habits formed by consumers during the COVID-19 pandemic in 2020 are proving sticky, aided by our initiatives to improve our omnichannel offerings for consumers," Frans Muller, president and CEO of Ahold Delhaize said in a statement. "We continue to be in a strategically stronger position in 2021 relative to the time before the COVID-19 pandemic began. Our investments in our online proposition continue to serve us well. In Q2, net consumer online sales continued to grow, coming on top of the very robust growth profile from the same quarter last year.”

That was certainly the case in the United States where second quarter sales benefited from organic growth and the acquisition of FreshDirect.

Second quarter online sales increased 61%, driven by addition of 86 new click and collect locations and the January 2021 acquisition of FreshDirect, the company said. Even if the favorable effects of that deal are excluded, U.S. online sales increased 29%, on top of a prior year increase of 126.8%.

Ahold Delhaize USA’s total sales growth exceeded same store sales because the company acquired 71 BI-LO and Harveys Supermarket stores from Southeastern Grocers in two separate deals during the first half of the year. Those stores entered the Ahold Delhaize USA sales base as closings occurred between January and April. The transaction had another notable impact as it pushed the U.S. division’s quarter end store count above the 2,000 location threshold to 2,044 stores, including brands such as Stop & Shop, Food Lion, The Giant Co., Hannaford, Giant Food, FreshDirect and Peapod.

Ahold Delhaize USA, a division of Zaandam, Netherlands-based Ahold Delhaize, is the parent company for Ahold Delhaize’s U.S. companies, consisting of Food Lion, Giant Food, The Giant Co., Hannaford, and Stop & Shop, as well as e-grocer Peapod; Retail Business Services, a U.S. support services company providing services to the brands; and Peapod Digital Labs, its e-commerce engine. Operating more than 2,000 stores across 23 states, Ahold Delhaize USA is No. 10 on The PG 100, Progressive Grocer’s 2021 list of the top food and consumables retailers in the United States

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